By John Waggoner

If you’re thinking of making Apple a core holding, your fund manager may have beaten you to it.

Morningstar says 788 U.S. stock mutual funds had Apple as one of their top 10 stock holdings.
For 465 funds, Apple was the largest position.
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And for a few, Apple was an enormous holding:
•Fidelity Select Computers, with 20.5% of its assets in Apple.
•PowerShares QQQ Trust, 15.7%.
• Turner Large Growth, 10.9%.
Fidelity Contrafund owns the most Apple shares: 14.5 million, worth about $8.2 billion, or 8.6% of the fund’s assets.
Apple, maker of iPads, iPods and Macs, would have made any fund manager giddy this year. The stock is up 66.8% the past 12 months, vs. 7.6% for the Standard & Poor’s 500.
Soaring to new heights

Apple stock the past twelve months.
If Apple hadn’t been in the S&P 500, the index would have returned 3.7% the past 12 months, S&P says.
Some funds’ Apple holdings may be a surprise to investors. Federated Kaufmann, for example, invests in midsize companies. Apple, the largest stock by stock value, is its fourth-largest holding. It’s the top holding of Tocqueville Opportunity, a small-company stock fund.
Some funds don’t have any choice in buying Apple: The stock is a member of the S&P 500 and the Nasdaq 100, and funds that track those indexes must buy it (Apple is 17.8% of the Nasdaq 100).
Other funds may have had Apple grow to a top position. Fidelity Contrafund, for example, started nibbling at Apple in 2003.
Normally, enthusiasm for a particular stock can be worrisome: If most funds already own the stock, there may not be many more buyers lined up. And mutual funds aren’t the only Apple fans: Institutions, such as pension funds, own $310 billion of Apple. The total fund industry owns $156 billion, says Morningstar. Wall Street currently values the company stock at $550 billion.
Alec Young, market strategist for S&P’s Capital IQ, says Apple now accounts for about 20% of the S&P 500 tech sector. “There’s a concentration problem now,” he says. Lately, a big Apple weighting has been good for sector returns. “But it cuts both ways over the long term,” Young says.
By most standard measures of valuation, Apple, which Wednesday rose $21.48 to $589.58 and set a new all-time high, isn’t juiced: Apple shares sell for about the same price-to-earnings ratio as the S&P 500, says Scott Kessler, head of technology sector equity research for S&P CapitalIQ. (The P-E is a measure of how expensive a stock is, relative to the company’s earnings.)